The "Great Satan" has invaded Iraq but students at Tehran University seem pleased at the prospect.

"It will be a good thing to have American troops in Iraq. Perhaps that will bring change to Iran," said Namin, a lanky engineering student strolling to class.

"Maybe that will put more pressure on the regime here." Unlike fellow Muslims in the Middle East or their predecessors 23 years ago who seized the United States embassy, students today are not seething with anger against America and are unmoved by the government's daily references to "the enemy" in Washington.

"I think only about the consequences of a war. If the war has good consequences, let it be," said another student, Mohammad. "We're not protesting like European students. We don't have a democratic government like they do. We're not acting like them because we're not in European shoes."

Politically incorrect attitudes on campus are not helping calm the nerves of the country's conservative leadership, which appears genuinely concerned at the implications of "regime change" next door.

According to Hassan Rowhani, secretary of the Supreme National Security Council, Washington is preparing to launch an elaborate "software war" against Iran. "After Iraq, the US administration plans to wage a media war against Iran, involving killing people's beliefs and changing their behaviour, to damage and destroy our national unity," Rowhani was quoted as saying.

The conservative clerics who rule Iran have been calling for "vigilance" and "national unity" in recent weeks. The hardline newspaper Keyhan wrote that Turkey and the Gulf states assisting the US should be "declared enemies" for betraying Muslims in the region. Conservatives have singled out Radio Farda, the US-funded shortwave radio service in Farsi, as a dangerous weapon in Washington's arsenal.

"The United States has goals in the region beyond Iraq," the supreme leader, Ayatollah Ali Khamenei, said last Sunday. Former president Hashemi Rafsanjani warned: "We should not pit our forces against one another or let the enemy infiltrate into our ranks through internal disputes."

Reports about Saddam rearming have never been taken lightly in Iran, which endured an eight-year war with Iraq in the 1980s. But since the last Gulf war, Tehran ceased viewing Saddam as an imminent threat and more of an irritant. Now US military action threatens to upset the status quo.

"Saddam could be managed and it was a predictable situation. Now there are too many open questions," said an Iranian journalist. "The regime feels encircled. There are US troops to the east in Afghanistan, to the north in Uzbekistan, to the south in the Gulf states and now Iraq."

Some analysts say that if Iraq emerges as a more open, democratic society than Iran, the conservatives will find it hard to suppress dissent or fend off calls for fundamental change to the theocratic system. The potential revival of Shia theological centres in Iraq could also provide an alternative platform for more moderate Islamic clergy in Iran who have called for limits on clerical political authority.

For reformists locked in a power struggle with the conservatives, Washington's plan for a military administration in Iraq is not a particularly helpful advertisement for western-style democracy. They fear the US-led war could provide a pretext for conservatives to stage a decisive crackdown against all public criticism.

"Lifting the sanctions against Iran would be much more helpful than yet more US military action," said one reform-minded MP.

Despite Iran's official condemnation of Washington's move against Iraq, the Tehran leadership has kept its options open in hopes of influencing a post-Saddam Iraq. Iran has cultivated relations with Iraqi opposition groups sponsored by Washington and offered safe passage to opposition leaders travelling to northern Iraq.

If Saddam Hussein's regime is overthrown, it is not just the students who will be celebrating. The 1980-88 conflict with Iraq, always referred to here as the "imposed war", left scars on just about every Iranian family. "There wasn't a week that went by without a funeral," said Leila, a housewife in west Tehran. "There were 18 boys killed just on this street."

Wearing a traditional chador as she served cups of Iranian tea, Leila spoke of the terror of bombs and Scud missiles hitting her working class district. "At least with the bombs there were air raid sirens, but the Scuds came down without warning," she said.

Families who lost their sons and fathers will be looking forward to Baghdad's defeat, she said. "Saddam has killed more Muslims than any western or Christian country ever has. That's something we cannot forgive."

Among war veterans, suspicions about Washington's motives and past support for the Baghdad regime are overshadowed by their memories of a war that claimed a million lives. "He was martyred. So was he," said Nasser, pointing to faded black and white photos of his teenage friends killed in the conflict. "Saddam brought us so much damage."

Nasser, who sells Panasonic video cameras and Samsung stereos from a small shop in Tehran, said he visits veterans in hospital still suffering from the effects of chemical weapon attacks.

"We will be pleased to see Saddam toppled after everything we suffered. Removing Saddam is what's important to us and it doesn't matter by whose hands," he said. "What comes after Saddam is also important and I'm pessimistic about US plans for a military governor ruling in Baghdad. It would be better if it was an elected government."